Tips to Jumpstart Your Giving

Kathy Kwan, Advisory Board Member, Stanford PACS

We invited long-time Bay Area funder, Kathy Kwan, to offer some tips for emerging donors based on her years of experience and learnings. While each person’s approach may be different and priorities will vary, these are some tips donors might consider as they think about getting started.

Fifteen years ago, my husband and I set up our family foundation. I knew very little about philanthropy but directionally knew I wanted to “do good in the world.” Being a person of action, I dove right in and started “learning by doing.” Like many emerging granters, I had so many questions: How do I make a difference? Is my approach sound? What does “impact” look like”? Should I grant more? How do I find good organizations? Why is it taking so much time and effort to find good organizations and people? I’m so grateful for having patient mentors, otherwise, I might have given up!

Through trial and error, here’s a couple of strategies that have served me well:

Plan before you give. Create a working budget. I use annual and multi-year spending targets to answer three questions: (1) How much do I want to grant? (2) How much am I giving to any one organization or initiative? (3) For this time period, how close am I to meeting the target? By embracing this mindset, I hold myself accountable to spend my charitable dollars, as well as set priorities and weigh the tradeoffs of new opportunities.

You might wonder how I decide on a spending target. Initially, I used the 5% year-end distribution requirement for family foundations. Then, as my portfolio of activities evolved, I started using past/current obligations, new funding opportunities, external events, and my own personal goals to set my annual and multi-year targets.

Pick a few causes to support. To achieve impact, I have found a clear, narrow focus works better than spreading my money across multiple issues and topics. Focus can be created using many dimensions: geography, socio-economic status, topic, age, issue, institution, type of grant, etc. There are many benefits to having a focus:

• Productivity—Having a clear focus reduces the amount of due diligence and research I need to undertake.
• Communication—I can create a clear “elevator pitch,” as well as provide good reasons for approving/rejecting grant proposals.
• Leverage—A narrow focus allows me to “string” together and leverage the lessons I am learning, the relationships and networks I am developing, and the impact I am making through my grantmaking.
• Priority—The few times I have spread myself too thin, I have learned hard lessons: I didn’t have money available when a good opportunity emerged, I lost track of what was happening across my entire portfolio of grants, and I struggled with the amount of impact I was making on specific issues.

Create a definition of success for each grant opportunity. I am a results-oriented person, who generally needs to know where I’m going and what I hope to achieve. (I should acknowledge that this approach may not be right for everyone.) To the extent possible, I internally have a reason for funding that includes why I might extend the grant and what I hope to achieve as a result of providing the dollars. This internal statement is informed by what my grantees can realistically achieve in the agreed-upon timeframe. Make sure to ask the question, “How does this grant, ‘move the needle’ or make a difference in my focus area?” Here are a couple of sample statements:

• I granted multi-year general operating support to the Center for Excellence in Nonprofits so that we can help nonprofit leaders become more effective and resilient during the Pandemic.
• To reduce the student dropout rate due to the economic consequences of COVID-19, I provided matching scholarship funds to UC Berkeley.
• I supported JobTrain’s efforts to address poverty and unemployment through career training by giving them a multi-year general operating support grant.

“Right-size each grant” knowing that larger grants work better. In general, when I am focused on impact, I grant between $50K-100K per organization. For most organizations, this enables them to start an initiative or hire a person to help start the work. Occasionally, I fund at the $10K level. These are still very important and valuable revenue streams for an organization, but I am not as vested in establishing a relationship or “pushing the envelope” for this particular cause or organization. 

 Where appropriate, give large, renewable, multi-year grants. (i.e. $150K/year for 3 years) Giving in this way accomplishes many things:

• It enables the organization to commit to larger initiatives.
• It helps build a relationship between the donor and the organization.
• I can use the renewal process to assess progress and discuss potential course corrections or large strategic shifts.
• A year-to-year structure provides you with an “out” if things go awry—i.e. change in leadership, change in quality of service, etc.

Developing a “point of view” jumpstarted my giving activities. Not only did I have a rough plan to guide my decision-making, I could also return and revise these strategies over time. If you have the inclination, please take some time to consider, incorporate, and write down your own point of view. Not only will it serve as a starting point for your own philanthropic practice, it will also help create your personal narrative and build confidence as you navigate your grantmaking activities. Now more than ever, the world needs philanthropists who are willing to provide relief and move the needle faster and with bigger commitments. Will you consider making the leap and joining me?